McCain shutdown: Mayors see risk to the food basket of Hawke’s Bay - ‘We cannot afford to accept this as inevitable’

Central Hawke’s Bay Mayor Will Foley and Hastings Mayor Wendy Schollum will be meeting with McCain representatives to discuss the reasons for the company’s closure.

Two Hawke’s Bay mayors will meet McCain representatives to discuss options to retain food processing factories in Hastings, as well as the strategic and commercial factors that led to the McCain closure.

The company announced on Tuesday that it would close its vegetable processing plant in Hastings next year.

Hastings Mayor Wendy Schollum and Central Hawke’s Bay Mayor Will Foley say they want to understand the reasons behind the decision.

Schollum said that, given two significant employers and contributors to the rural economy had announced closures or restructures within weeks of each other, “we need to understand what is driving that, and what can be done to respond”.

Hastings District Council will also be working with Foodeast Haumako (the regional food, beverage and agritech hub) to bring together food producers, manufacturers and supply chain businesses from across the region.

Schollum said this would help get a clearer picture of the pressures facing the sector, to test what messages it needed to take to the Government and to identify where collective regional action was needed.

“Undoubtedly, rising costs across the supply chain, from growing to transport to processing, are part of the picture.

“Energy costs are likely to be a significant contributor, but we also need to understand the broader competitiveness pressures our regional industries are facing.”

Foley said the sudden closure was a complete shock and had come at a time when clouds of uncertainty hung over the community.

“We have about 9000 hectares of crops, worth millions of dollars to our local economy.

“Then there’s the rest of the Hawke’s Bay production, with a chain of people affected, from contractors to truck drivers and factory workers. It will be monumental.

“We need to protect Hawke’s Bay’s food basket by enabling businesses to start having conversations earlier.

“We need to be proactive and get to the bottom of the concerns impacting our businesses. As a result of this closure, our producers will need to diversify. What are their options?”

Schollum said there should be a much stronger focus, both regionally and nationally, on ensuring businesses in regions such as Hawke’s Bay could remain viable in the face of cost pressures.

“We cannot afford to accept this as inevitable.

“If we don’t get this right, we risk hollowing out the very industries that underpin our economy and provide jobs for our people.

“We urgently need to identify how we can support affordable, reliable energy, strengthen the competitiveness of our food and fibre sector, and build a diverse local economy that is resilient over the long term.

“As a council, we will stand alongside those affected and push hard for support where it is needed and continue advocating for our region in national conversations about energy, economic resilience, and the changes needed to protect jobs and keep industry in our region.

“Our district is built on the strength of our growers, our workforce, and our supply chains. Losing pieces of that network is not just an economic issue – it goes to the heart of our community.”

Foley said the region needed to plan for resilience to protect it from external shocks and forces that were really hurting it.

“The opportunity is to address this now so we are much better placed for the future.”

McCain’s New Zealand operation has made losses for three of its past five financial years.

The company said it made the closure decision after a strategic review of its Hastings operation, and the move reflected a shift in how it would supply vegetables in Australia and New Zealand.

LDR is local body journalism co-funded by RNZ and NZ On Air.